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The Chinese Outbound Market
By Doctor Roger March
Director
Inbound Tourism Studies Centre


Overview of Chinese Outbound - 1
  • 1983: Pleasure travel begins (to HK)
  • 1991: travel allowed to Malaysia, Singapore, Thailand
  • 1995: 4.52M overseas (-25%); 1.26M for pleasure
  • 1996: 5.06M overseas (+12%)
  • Up to 12.5M overseas travelers expected in 2001?
  • Main destinations: Hong Kong, Thailand, Macau, Singapore, and Korea
  • 2 travel types: official (govt./study/technical missions) & private (45%)?
  • Main source markets are provinces of Beijing, Guangdong & Shanghai
Overview of Chinese Outbound - 2
  • Singapore, Thailand, Malaysia, Philippines Hong Kong & Macau have Approved Destination Status (ADS)
  • ADS destinations account for 70% of outbound market
  • 1997: over 5M visitors to ADS destinations
  • Japan and South Korea reportedly seeking ADS
  • Introduction of 5-day work week in May, 1995 increased leisure time
  • China has 81 civil airports capable of handling Boeing 737s or larger (end-1995)
  • Chinese travel to HK, Thailand, Singapore in 3Q 1997 dropped sharply (-21% to 470,000 -28% to 91,000, -3% to 49,000)
Government role in outbound travel
  • Travel and tourism industry controlled by the China National Tourism Administration (CNTA)
  • Chinese government is concerned about loss of hard currency
    CNTA control mechanisms: limited travel allowance, tight control of travel documents,and complicated procedures for joining group tour.
        - travel to Singapore has fluctuated amid complaints of fewer exit permits & banker’s guarantee of (US$709) per person
        - CNTA reportedly considering introducing 10% quotas on number of outbound tourists handled by TAs
  • But in 1996 China had 6.74 million overseas visitors and 5.06 million outbound travelers?
  • All travel agents are government owned - but self-funding
Structure of Outbound Industry
  • 67 outbound agents able to sell travel to Australia
  • Lax regulation led to emergence of unethical operators in regional cities
  • Group travel preferred to individual
  • High degree of competition
Characteristics of Chinese tourists
  • Group travel dominates
  • Strong desire to experience Western culture
  • 80% are male and ave. age of 45 (NZ Tourism Board)
  • 30% are male and 75% over 50 (PATA 1996 survey)
  • Short-haul destinations favoured
  • Multi-destinational travel returning through HK popular
  • Sightseeing popular: Australia’s theme park appeal
Characteristics of Chinese tourists
  • Strong propensity to shop?
  • Overall, less spending on lodging, food & transport
  • Strong desire to eat Chinese food
  • Little English spoken - strong demand for Mandarin-speaking local guides
Chinese Travel to Australia
  • Tripled 1992-96: 18,700 to 54,000 (23% holiday)
  • 62,180 arrivals 12mths ended Sept 30 1997
  • TFC forecasts of 139,000 by 2001 ‘conservative’
  • Australia was the 3rd most desired destination after US and Japan (1996 PATA survey)
  • 5 carriers on China-Australia route: Qantas, Ansett, China Eastern, China Southern, Air China
IVS 1996 Profile
  • 66% male & ave. age 44
  • 45% visited Hong Kong
  • ave. stay: 45 nights; median stay 11 nights
  • Main destinations: Syd (47% of visitor nights), Mel (24%), Bris (24%)
  • 56% of visitor nights with friend or relative - highest of any inbound market
  • strongest desire to visit casinos of any market
  • most dissatisfied market with visa requirements, cost of ground transport & cost of accommodation
The critical issues
  • Is China the next Korea?

    - below-cost tours & proliferation of ‘fly-by-night’ ITOs

  • Australian industry uneducated about needs of Chinese market

    - All-Asians-are-the-same syndrome

  • Chinese travel industry and consumers have little knowledge of Australia

    - Chinese travel trade needs to be educated about Australia
The critical issues
  • Economic downturn in China? Likely to trigger:
  • - cuts in govt-funded overseas travel – government clampdown on outbound holiday travel

Copyright © Roger March 2003

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